Things you need to know before investing in crowdfunding
Investing today is within everyone’s reach. It is not necessary to have a large sum of money to make an investment and this is thanks to the crowdfunding method. However, you may ask yourself the following questions: What is crowdfunding? How can I invest in crowdfunding? or What do I need to know before I dive into the pool and invest in crowdfunding? Below we will answer all those questions so that you can make a fully conscious investment.
What is crowdfunding?
Crowdfunding is a method of collective financing that aims to help small entrepreneurs to put their business idea on its feet. In fact, the term crowdfunding can also be referred to as “collective financing” or “micro-finance” in Spanish.
How can I invest in crowdfunding?
Investing in crowdfunding is easier than you think. You just have to register on a platform that offers this type of financing (make sure the platform is authorized by the Spanish regulator, the CNMV) and take a look at the projects that are active. You will be able to invest in all the projects that catch your eye with a minimum amount of money.
In addition, with this method you will be able to know the business plan of each of the projects that interest you without any kind of commitment since one of the characteristics of micro-finance is that the entrepreneurs make available to the investors all the documents about their business idea. You will be able to consider your options and invest in the project that best suits you.
What do I need to know before investing in crowdfunding?
Before you jump into the pool you have to know the land around you. That is why we are going to give you some ‘rules’ about financing through crowdfunding.
Not all platforms are the same
Before you decide which platform you have decided to register on, check them out. Not all crowdfunding platforms are the same. The business model may be different on each of them and, in addition, they may focus on a certain project profile that may not suit you very much. Choose the one that best suits you.
In addition, some platforms leave the way open for entrepreneurs, while others carefully select the projects to be uploaded to the platform. In this second option, the team that runs the platform will analyse whether the projects presented to them can be profitable or not.
Read carefully the benefits you will get by investing in a project
Before you get on the trampoline and take the leap, it is important that you check out what that campaign offers, the benefits. Not all of them offer the same thing, so read the project very well to always take into account what you will gain with that project.
You should not be left with any doubts
If you have any questions, ask. By investing in crowdfunding you have the advantage that you can get to know the whole project first hand and that you can even talk to the entrepreneurs so that they can explain to you what you do not understand. There should be no loose ends when investing in a project.